University of Washington Human Resources

Professional & organizational development, succession planning.

Succession planning is the process of identifying the critical positions within your organization and developing action plans for individuals to assume those positions. Taking a holistic view of current and future goals, this type of preparation ensures that you have the right people in the right jobs today and in the years to come.

In the long term, succession planning strengthens the overall capability of the organization by:

  • Identifying critical positions and highlighting potential vacancies;
  • Selecting key competencies and skills necessary for business continuity;
  • Focusing development of individuals to meet future business needs.

A succession plan identifies future staffing needs and the people with the skills and potential to perform in these future roles. Professional & Organizational Development’s Succession Planning Toolkit will help guide you, though we strongly suggest you involve your assigned HR consultant and/or HR administrator in this process as well.

We’ve broken succession planning down into three phases with clear steps, and the Succession Planning Toolkit (PDF) comprises a series of worksheets that move you through the succession planning process. Within this document, you’ll find templates and tips for:

  • Ensuring succession planning is closely tied to business strategy and goals;
  • Understanding the importance of engaging executive and senior leaders in the process;
  • Clearly defining the development of key talent; and
  • Ensuring staff understand their role in the process and know what is expected of them.

Assessment phase

Step 1: Identify significant business challenges in the next 1–5 years.

Step 2: Identify critical positions that will be needed to support business continuity.

Step 3: Identify competencies, skills, and institutional knowledge that are critical success factors.

Evaluation phase

Step 4: Consider high potential employees.

Step 5: Select the competencies individuals will need to be successful in positions and to meet identified business challenges.

Development phase

Step 6: Capture the knowledge that individuals possess before departing the organization.

Step 7: Develop a pool of talent to step into critical positions through targeted career development strategies.

Access and print the entire Succession Planning Toolkit (PDF) .

What Is Succession Planning? 7 Steps to Success

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What are seven steps to follow when you are succession planning?

You can’t run a business, regardless of its size, without talented people ready to move into key positions when the current occupants leave. Even the most successful employers can run off a cliff if they don’t have a solid succession plan in place.

What is succession planning?

Succession planning is a strategy for identifying and developing future leaders at your company — not just at the top but for major roles at all levels. It helps your business prepare for all contingencies by preparing high-potential workers for advancement.

Here are seven tips for kick-starting the succession planning process at your company.

1. Be proactive with a plan

Sometimes, you’ll know well in advance if a hard-to-replace team member is going to leave the company — a planned retirement is a good example. But other times, you’ll be caught off-guard by a sudden and potentially disorienting employee departure. That’s why you need a plan — now.

First, consider all the key roles on your team and answer these two questions:

2. Pinpoint succession candidates

Once you have a handle on the ripple effect that the departure of certain employees might cause, choose team members who could potentially step into those positions.

Ask yourself:

While the obvious successor to a role may be the person who is immediately next in line in the organizational chart, don’t discount other promising employees. Look for people who display the skills necessary to thrive in higher positions, regardless of their current title.

But don’t just assume you know how people on your team view their career goals. You may have certain team members in mind for senior management roles, but who’s to say they’ll even be interested in the idea once it’s presented to them? If you haven’t already, talk to these employees about how they view their professional future before making your succession choices.


3. Let them know

In private meetings, explain to each protege that they’re being singled out for positions of increasing importance. Establish an understanding that there are no guarantees, and the situation can change due to circumstances encountered by either the company or the succession candidates themselves.

4. Step up professional development efforts

Ideally, you have already been investing in the professional development of those you select as your succession choices. Now that preparation needs to be ramped up. Job rotation is a good way to help your candidates gain additional knowledge and experience. And connecting them with mentors can boost their abilities in the critical area of soft skills: The best leaders have strong communication skills, as well as polished interpersonal abilities, such as empathy and diplomacy.

5. Do a trial run of your succession plan

Don’t wait until there’s a crisis to test whether an employee has the right stuff to assume a more advanced role. Have a potential successor assume some responsibilities of a manager who’s taking a vacation. The employee will gain valuable experience and appreciate the opportunity to shine. And you can assess where that person might need some additional training and development.

6. Integrate your succession plan into your hiring strategy

Once you’ve identified employees as successors for critical roles in your organization, take note of any talent gaps they would leave behind if tapped. That can help you identify where to focus your future recruiting efforts .

7. Think about your own successor

When making a succession plan for your organization, keep in mind that your own role will someday require backfilling. Maybe you’ll decide to take advantage of a new opportunity, or you’ll put in your time and retire from the workforce. So it’s important to ask yourself, which employee could step into your shoes one day? And what can you do, starting now, to help that person prepare for the transition?

The members of your workforce aren’t fixed assets — and changes in your team’s lineup are inevitable. You may not always be able to predict a valued employee’s departure from the firm. But through effective succession planning, you can pave the way for the continuity so critical to your business’s future.

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Latest blog posts, proven succession planning in 7 easy steps.

succession planning definition slide

Succession planning: it’s planning for the worst by expecting the best. That’s because this is your organisation’s opportunity to plan ahead of key departures while preparing current employees for future roles and developing them.

Whether you call it succession planning, anticipatory  workforce planning  or something else, succession planning can be a win-win for your people and your business. This article will help not only outline how to do it, but how to succeed at it, too.

Enjoy our guide to helping build your next great people strategy today.

What Is Succession Planning?

What is the succession planning process, succession planning: frequently asked questions, is there a succession planning framework, the succession planning process in 7 steps, watch: how to create data-driven compensation, the two most common succession planning process mistakes, what metrics determine succession planning success.

Succession   planning  is the process of replacing your organisation’s leaders and managers with high-potential, internal (sometimes external) replacements. Essentially, it is about identifying, developing and replacing employees to make a potential shift in responsibilities/hierarchy as smooth as possible.

What Is The Purpose Of Succession Planning?

The  purpose   of   succession   planning  is complex. It is not simply about damage control or replacing a key leader as quickly as possible. It’s about replacing a leader with someone prepared for the role, with the potential to succeed, who can shift into the position both quickly and successfully (with added emphasis on  successfully ).

Why Should You Build A ‘Succession Plan’?

Building a  succession   planning   process  or  framework  is about mitigating the risks of organisational change. This way, when a change at the very top occurs, the friction between departments, teams and employees is reduced or becomes nonexistent, because the ‘vacuum’ of institutional knowledge is removed.

Let’s consider the image above as a quick run-through of how the succession planning process works, these are the seven key steps in the succession planning process:

Start identifying key positions

Identify needs

Develop your job profiles

Start the recruiting process

Appoint a successor

Handover the job

Document the transition

Later on in this article, we break each of these seven steps down so that you can master succession planning with ease.

Who Should Lead Succession Planning?

HR is primed to be a key leader when it comes to succession planning. That’s because both succession planning and workforce planning go hand in hand. As part of projecting the future of an organization, HR teams need to have an incredibly clear vision of the key roles within an organization, and what it would mean for those roles to become vacant.

How Does Succession Planning Relate to L&D?

If we think of succession planning not only as replacing but of adequately preparing employees to take on new roles, HR has a role to play here in terms of career development, learning, and training.

What Are The Benefits Of Succession Planning?

Because it keeps hiring costs down, improves your employer brand , and boosts retention rates at the same time. Succession planning matters because it helps to maintain a foundation of organizational stability, even in times of profound change. It ensures that even when key employees, their absence (at least professionally) is not felt.

Is Succession Planning Becoming More Popular?

The growing demand for succession planning strategies will grow as an entire generational workforce (primarily baby boomers) will retire. As a result, companies need to find qualified employees who can pick up these leadership roles and run with them. In sum, succession planning allows companies to preserve key qualifications while avoiding protracted and costly recruiting processes.

How Often Should Organisations ‘Succession Plan’?

Succession planning should be a yearly topic for companies that are growing quickly. Or, it could be thought about in five-year increments for companies on a steadier trajectory of growth.

If you want to start a succession planning strategy, you need to have a plan in place. But, where do you start? Here are some of the general steps you’ll need to take:

Keep in mind, though, that succession planning is not only relevant for large or medium-sized companies. Even small, family-run businesses should have a plan in place when it comes to successful succession.

Looking to build up talent pools in your org? Read our full guide to it today.

What Is The First Step In Succession Planning?

The first step in succession planning is  identifying   key   positions . After all, succession planning is based on departure, so you need to consider which roles are at risk.

Key positions come in all shapes and sizes. It helps to have a strong handle on where the highest amounts of ‘institutional knowledge’ exist within your organisation. Once you know that, you can prepare for departures accordingly.

The nine-box grid can serve as the first step for your succession plan. Read about it right here.

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Now that you know a bit more about succession planning as an HR strategy, and why it matters, how can you do it? Here are seven well-coordinated steps to ensure key positions are filled successfully…

1) Start Identifying Key Positions

This is going to require some internal reflection. Begin the succession planning process by identifying qualifications that are essential to your company’s success. This could include years of experience, qualifications or licenses, or other ‘soft skills’ that have an impact on company success (like customer relations abilities, for example).

Then, you need to write them down. So, take these qualifications essential to your company’s success and document them in what we might call ‘ initial job profiles .’ Now you have an idea of what you need, relatively speaking, but we need to dig a bit deeper to get to the core of the issue…

2) Identify Needs

If we start by knowing the key qualifications that influence success, now we need to plan for where we might lose those skills . So, you need to establish which key positions might become vacant in the near future. Ask yourself:

Which employees are about to retire?

Are any employees currently pregnant?

What is your overall attrition rate ?

You can also take a top-down approach in this step, and plan for your entire company’s succession plan starting from your CEO to executive leadership and further down the organizational chart. That said, if you are in a pinch and want to get started immediately, you should start filling gaps that may reveal themselves sooner than later.

In this step, it is also important to include the financial resources you may need for the recruiting process. It is important to note how the recruiting process transfers into time (and money) spent. It’s also at this point that proper recruitment software can help maintain efficiency without draining resources .

3) Develop Your Job Profiles

A key part of the succession planning framework is having fleshed-out job profiles in place. What constitutes an effective job profile, though, and where should you focus your efforts? Here’s a quick rundown:

Think of this as your template for finding the ideal person to fill this role in the future. Essentially, it is taking the current person who occupies this role and turning their skills into something of a blank canvas. This transforms skills thought to be irreplaceable into an actionable plan for recruiting.

4) Start The Recruiting Process

Concrete examples of succession planning typically begin during the recruiting process . This is where the process takes shape, and it helps if you approach it from several key angles, including:

Building up your talent pool.

Implementing an employee referral program .

Providing targeted upskilling training for current employees.

If you are taking a proactive approach, maybe you have all the time in the world for succession planning. But, if you’re low on time, you may want to set deadlines for finding a suitable candidate or completing the handover period.

5) Appoint A ‘Successor’

Whether internally or externally, this is the part of succession planning that signals the end. While a lot of the heavy lifting may have been done during the job profile stage, now you have someone in mind who could be able to take on this role.

Apart from interviews, though, finding the right candidate during the succession planning process should rely on more nuanced measures. You should work with assessment centers , case studies, or work trials, to determine the best fit.

That said, a technical fit is not always a cultural fit. For succession planning to be successful, it often comes down to how someone fits within a company’s distinct culture.

How do you begin to evaluate this? First, you likely need to have a hold on your own culture and what it means to work with your company, but you may want to consider the following to evaluate a candidate’s fit:

An interview with potential peers to see if they mesh well.

A case study directly related to their soft skills (perhaps giving or receiving feedback).

Scheduling a more casual interview setting (like lunch) for a candidate to show more of their personality.

This is the part of succession planning that you need to get right. After all, you now have someone that you have deemed the right fit for the role. So, they need to be the right fit from multiple angles, and not based on whether they can do the job or not.

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6) Hand Over The Job

When done right, succession planning also loops in the person leaving the role. This is most felt during the handover process , where a new employee gradually learns their new tasks, both from their future coworkers and team leads, as well as from their predecessor (who will share existing knowledge or institution knowledge they only have).

Keep in mind, though, that the handover period shouldn’t be too short. Especially if a key position is being filled, it is important to bake in more time (think in terms of months and not weeks) for an employee to manage complex tasks that used to go smoothly. They will get there, but they require patience.

However, if a handover period is too long, there is a risk that the successor won’t be able to come into the role in their own right. They will be too influenced by how the role used to perform, and you may lose out on the future-oriented skills that you feel this role needs to thrive.

The best answer is somewhere in the middle. While team leads should have a long-term perspective, there should be an active, fast-paced, and collaborative approach to handing over knowledge. Ideally, this would also be done through confluence pages or a company wiki, where institutional knowledge is public and not private.

7) Document The Transition

Now that the handover of the job has been completed, what comes next? Documenting the transition is a crucial step, in order to note how the position was filled and to inform future processes. Keep in mind the following:

The demands of this position in particular.

Processes that went smoothly during the handover.

Issues during the handover that caused confusion.

Gaps that still potentially exist.

In the future, this will help optimize your recruiting process, as well as succession planning strategies for similar roles that may become available.

How Do You Identify Important Positions For Succession Planning?

Keep some of these succession planning best practices in mind:

In the end, it is key to think about it like this: Seniority is not the only qualifier for succession planning in a company. You also need to keep in mind skillsets, relationships, how long someone has been at a company, and if they were at the company during a key stage of growth or during challenging times.

For example, an IT specialist may hold a key position within your company if they are competent in a programming language that is important for your business. While they may not even be senior, they may have invaluable skills that would make their departure a key loss for the company.

When Should A Key Position Be Filled Externally?

For succession planning to be successful, you need to think about whether your company currently has the talent to replace a key position. This means that, even if it is cheaper to fill a position internally, it does not guarantee that a current employee is up to the task.

In fact, an employee may not be qualified for the role, but they also may not be interested. Here is what you should consider for either internal or external fillings:

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Effective succession planning is crucial when it comes to one key filling: your CEO. In most cases, CEOs don’t retire every day. However, one in every ten successions is unexpected.

For this kind of succession planning to work, you will need to have a set of specific steps prepared. More importantly, please make sure you don’t fall into either of the following two common traps:

1) Underestimating The Time You Will Need

Start the succession planning process early. Ideally, you would do so five years ahead of time. This would then entail developing steps and processes to find the ideal succession candidate to manage the transition effectively.

After all, this is about far more than simply finding the right fit. You need to find the right candidate, develop them, and prepare them for the role, and this can take a great deal of time and effort.

2) Not Having A Contingency Plan

If a key person leaves a company unexpectedly at short notice, their position may remain vacant for some time. That is if you have not actively planned for their succession well ahead of time.

But, certain positions need to be filled quickly to make sure the company stays on track. In exceptional situations, you shouldn’t wait until you’ve found the right candidate – work with interim management instead.

In these cases, HR consultants will usually provide an experienced manager for a temporary deployment at short notice until a permanent successor has been found.

Now that you have a succession plan in place, how do you determine if it is working or not? These key metrics and KPIs can give you a relatively accurate read of whether or not your plan is working correctly:

Succession Planning With HR Software

There are many reasons why HR software can act as an invaluable tool during the succession planning process. Think of it as a combined, holistic effort: You have a consistent read on statistics, a formalized and streamlined performance process, and the recruiting infrastructure to match.

All of these things come together in an all-in-one solution. It offers you the visibility you need, the forethought to be able to plan ahead, and the talent in front of you to make it a success.

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For line managers , Personio seamlessly builds automated performance cycles, tracks vacation days and keeps employee information up-to-date (and in a compliant fashion).

For employees , no more fussing with cumbersome tools and processes. Employees can request days off, change their information and keep track of goals and more. All from one place.

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What Is Succession Planning?

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Succession planning and diversity.

Succession Planning Basics: How It Works, Why It's Important

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Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

company succession planning methods

The term succession planning refers to a business strategy companies use to pass leadership roles down to another employee or group of employees. Succession planning ensures that businesses continue to run smoothly and without interruption, after important people move on to new opportunities, retire, or pass away. It can also provide a liquidity event , which enables the transfer of ownership in a going concern to rising employees. Succession planning is a good way for companies to ensure that businesses are fully prepared to promote and advance all employees—not just those who are at the management or executive levels.

Key Takeaways

Understanding Succession Planning

Succession planning is a contingency plan. It is not a one-time event. Rather, it should be reevaluated and updated each year or as changes dictate within the company. As such, it evaluates each leader’s skills, identifying potential replacements within and outside the company and, in the case of internal replacements, training those employees so they’re prepared to assume control.

In large companies, the board of directors typically oversees succession planning in addition to the chief executive officer (CEO), and it affects owners, employees, as well as shareholders. A larger business may train mid-level employees to one day take over higher-level positions. For small businesses and family-owned companies, succession planning often means training the next generation to take over the business.

The process takes a lot of time and effort. As such, it requires:

Businesses may want to create more than one type of succession plan. An emergency succession plan is put in place when a key leader needs to be replaced unexpectedly. A long-term succession plan, on the other hand, helps the company account for anticipated changes in leadership.

According to human resources (HR) experts, succession planning involves preparation rather than pre-selection. This means that those responsible must identify the skills, practices, and knowledge. Although it may seem like a complex process, it doesn't have to be, especially if businesses and leaders are able to organize and plan ahead of time. The whole process can take anywhere between 12 to 36 months.

In small companies, the owner alone may be responsible for succession planning.

One way to succession plan in a business partnership is for each partner to purchase a life insurance policy that names the other partner as the beneficiary. This type of succession plan is called a cross-purchase agreement and allows the surviving partner to continue operating the business.

Here's how it works. If one partner dies at a time when the surviving partner would not otherwise have enough cash to buy the deceased partner’s ownership share, the life insurance proceeds make that purchase possible.

Succession planning is also commonly known as replacement planning and often involves passing on ownership of a company to someone else.

Benefits of Succession Planning

There are several advantages for both employers and employees to having a formalized succession plan in place:

Succession planning can also cultivate a new generation of leaders, thereby providing an exit strategy for business owners who want to sell their stake.

One of the key drivers to success for any company (whether it's a small business or a large corporation) is how inclusive it is. Companies are now recognizing the need to diversify their work environments in order to remain competitive and successful. Not only does it boost employee morale, but it also aims to broaden the pool of talent and make attempts to fight bias.

But how do companies do this? This involves a well-structured succession plan that includes hiring individuals from different backgrounds, those who have different leadership abilities, and people who bring different experiences to the table. The plan should also include removing any barriers that may exist internally for employees of all levels and ensuring a comfortable work environment for all employees.

This only works if succession plans are put into place wholeheartedly rather than to boost corporate images.

How Does Succession Planning Work?

Succession planning is used by businesses to streamline the process involving a change of leadership or ownership. It involves recognizing internal employees who merit career advancement and training them to assume new roles within the company. These plans only work if companies take the steps necessary to prepare. Plans are often long-term to prepare for inevitable changes in the future. Emergency plans can be set in place to account for unexpected changes.

What Is Succession Planning in Business?

Succession planning is an important part of any business to help it run smoothly and without interruption whenever there needs to be a change in leadership. Changes can be the result of people leaving the workforce (changing companies, switching careers, or retiring) or if there are unexpected circumstances, such as the death or displacement of a team member.

What Are Some of the Common Mistakes Companies Make During Succession Planning?

Succession planning requires careful organization and (as the name suggests) planning. Companies may miss opportunities or make missteps if they can't communicate their vision with employees, don't adopt a formal agreement or plan (including a shortlist of candidates and conducting regular reviews of positions and employees), assume their talent has the skills and knowledge to advance and succeed, fail to use succession plans for all employees, and ignore the need to diversify their talent pool.

SHRM. " Engaging in Succession Planning ."

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Beginner’s guide to succession planning: Steps and processes

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Succession planning is a process that ensures your company is prepared for the future. That way, when a key employee leaves, you already have someone in mind to fill their position (who, hopefully, has been groomed for this eventuality).

Succession planning keeps your business moving forward during the inevitable changes that come with running a business. And such plans serve as an excellent tool for retaining your strongest performers, who often tend to be the type of employees who need to know where their career is headed.

Just like you need to know where your business is headed.

Be prepared to make succession planning an ongoing effort. You can’t just sit in a meeting for two hours studying your org chart , then go back to regular business and forget about it.

The best succession plans are living, breathing things that get reviewed and refreshed on a regular basis.

It’s a process that, once you start, you need to continue. It’s something your company should revisit annually to make sure people are on track and to see if there have been any changes or movement within the organization.

Here’s your go-to guide on how to get started. Follow these tips:

1. Know who you are as a company

When it comes to succession planning, it’s important to recognize that it’s not a one-size-fits-all process. To get the most benefit from succession planning , your company’s top management must begin with a clear idea of who your company is in order to plan properly for its future.

Consider the examples of an electric company versus Tesla. The electric provider is a company that promises consistency and reliability to its customers, while Tesla focuses on hard-charging, best-in-class performance. There’s no right or wrong here – it just means different types of companies seek different types of leadership.

By understanding “who” your company is, you can better identify its potential new leaders.

2. Look at your entire organization

The next step is to assess your current workforce to identify key positions and key employees, recognizing that sometimes key employees are not in upper leadership but in support positions.

Yes, you need succession plans in place for the C-suite, but what about your shop foreman who never met a problem he couldn’t solve? Or the customer service rep that every client loves and asks for by name?

The key to a successful succession plan is that you take a look at all of your employees and make sure you haven’t missed any important person or position.

3. Determine your succession planning strategy

There are many ways you can go about succession planning. The best succession plan is the one that fits your organization. To determine what will work best for your business, consider these questions:

Ultimately, any succession plan needs to focus on what you can do to proactively preserve the wealth of institutional knowledge that drives your company’s productivity.

4. Identify your rock stars

Once you’ve identified key positions, you need to find two to three employees who would make good successors for each of those critical roles. This requires you to look at employee performance objectively, and to take personal attachments out of it.

Often, employees who are the most extroverted are the ones who get considered for promotion. But sometimes your strongest performers aren’t the most visible . That’s why you need to carefully consider every individual for both skills and emotional intelligence.

Your highest-potential employees will be lifelong learners who are both self-aware and socially aware. They’ll also be great problem-solvers, adaptable and able to take on more responsibility. You’ll want to avoid promoting people who tend to get involved in office drama, resist change and spread negativity.

5. Tackle tough decisions and discussions

You also need to have conversations with your employees to find out what their career goals are, where they see themselves in the future, and what development they (and you) feel they need in order to get there.

Be prepared to find that some employees you consider to be high potential for advancement aren’t interested. That’s okay. You need solid performers at every level of the organization.

Done right, succession planning can be a powerful recruitment tool, helping your organization improve retention and company culture . For the benefits to occur, though, it’s important to communicate the hows and whys behind who has been tapped to move up.

Succession planning won’t just help you build a future for employees you consider to be promotable; it will also expose the employees who aren’t promotable, at least at this time.

For those who are not slated to move up, you need to be prepared to talk through the tough decisions you’ve made – and have what may be difficult discussions with some of your employees.

6. Understand that growth doesn’t have to be upward

Your employees are the backbone of your company, especially the ones who do a good, solid job, day in and day out. But some of these employees may not have the potential to move up – either because they’re already doing the jobs they’re best suited for, or simply because they’re not interested in rising through the ranks.

That’s where your definition of growth needs to be expanded to include more than just upward mobility. Employees can also grow and develop laterally, positioning them to continuously improve at their current jobs and even find new meaning in them.

To keep your “solid Sams” happy, make sure they feel valued. These employees need to know that, just because they won’t be moving up in the organization, it doesn’t mean they can’t still become the best they can be at their current job.

Let them know that you will continue to help them develop so they can stay fresh in their positions. To feed their need for recognition, you may need to expand their responsibilities to include training less-experienced employees or encourage them to speak at industry conferences. The possibilities are endless when it comes to personal development.

The most important thing is to make sure they feel that, even though they’re not slated for the C-suite, their contributions are essential to the success of your organization.

Still not sure how to get started with your company’s succession planning? Get more great tips by downloading our free e-magazine: The Insperity guide to succession planning .

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Home » Blog » 5 Methods for Measuring Succession Planning

5 Methods for Measuring Succession Planning


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5 Methods for Measuring Succession Planning

Succession planning  is the process of identifying and developing new leaders who are able to immediately replace old leaders when they leave or retire. Essentially, it is the planning for the continuity of leadership by developing internal people who have high potentials of filling up the key business leadership positions in a company. Managing the succession of talent is a vital strategic process that minimizes gaps in leadership and enables your best people to  develop the skills necessary  for possible future roles. Succession planning has many benefits , especially for employee engagement. A research showed that 94% of employers report that the involvement of a succession plan positively impacts their employees’ engagement levels. Once you have set in a succession plan in place, it is equally important to measure its success rate. Here are 5 methods for measuring succession planning:

Establish the objectives

Bench strength

Pipeline Utilization

Developmental improvements

The first step to measuring the effectiveness of the succession planning process is to establish key objectives. Have a clear vision as to what you want to accomplish from succession process. Consider both qualitative and quantitative goals that focus on employee development. Qualitative objectives can be based on developing leadership competencies, such as communication and decision-making skills.

The organisation, before developing the succession management program should conduct a thorough review of candidate qualifications, development needs and strengths, organizations run the risk of over or underestimating the talent available. The key objective for a succession planning program is to build pool of employees who are ready for to handle more challenging responsibilities.

Utilize the positions filled by succession candidates to keep track how thoroughly the success pipeline is filled. Then, prioritise most critical and pivotal roles first, and work your way to less-critical ones. Always keep a count on the number of candidates in the pipeline. The optimal number will depend on turnover rates and other factors, but the number should ensure that there is enough talent in the pipeline to handle a variety of emergencies, including the loss of “heirs apparent” to key positions.

A succession management program can only be successful when the organisation is accountable. The program should provide the candidates with opportunities to grow and the organisation should evaluate and monitor their progress with the help of tools like scorecards and multi-rater.

Analyse Reports Since a succession planning program is about developing leaders, it needs leadership backing to be successful. Get that support by providing regular reports of valid and effective measures. One of the best measurements of a succession planning process involves identifying how many employees have advanced or are ready to advance into new leadership roles. If often take months, if not years, to measure and see the value of succession planning. The reason it takes so long is because each potential successor has to be developed and groomed to determine the best candidate among them. Succession management is the link between the present and future of an organization. The best way to ensure success is to provide future leaders with development opportunities that are both structured and divers.


This article is going to explain what succession planning is and how it can be applied to your business.

After reading this guide, you will have a strong idea of creating or improving your succession planning process and the best practices involved.

What is succession planning?

Business succession planning, benefits of succession planning, succession planning process, succession planning best practices, faq about succession planning.

Succession planning is the process whereby you identify new leaders and develop them to take over the role of the incumbent.

For businesses to thrive, it needs to avoid moments of crisis and lack of leadership.

At some point, succession planning will help with such a situation by preparing a candidate for a planned or emergency replacement. This could be because of retirement, a new opportunity, or in the event of death.

Succession planning is your safety net to ensure that business operations can remain smooth. A robust process will help you identify key individuals who could fill leadership positions.

In the best-case scenario, you will be given advance notice when someone is going to leave. A succession plan prepares you for the worst-case scenario and no notice.

At the same time, an effective succession planning strategy will avoid any questions of succession where leadership positions are concerned.

In the monarchy, this is often resolved through the order of succession. A well-understood model that passes the office to the nearest descendant. This model is also common with family-run businesses that intend to leave the business to their children or next of kin.

In business, succession planning plays a vital role in identifying candidates to take on more challenging roles. When an important postholder departs they leave behind a void that can disrupt the company.

No matter the size of your business, a succession plan is a key to having a smooth transition.

Large companies such as Pepsi , Microsoft , and General Electric have well-known succession plans for executive talent.

For large corporations, it will typically fall to the CEO and the board of directors to oversee the succession plans. They will evaluate employees to identify leadership qualities and provide training for those in consideration.

Often the succession plan will look internally for candidates to take over positions. However, some companies may look to external candidates and may even employ the use of headhunters.

Smaller-scale companies may not need a comprehensive succession plan compared to large businesses. However, there will still be a need to identify someone to take over in the event of an emergency.

Therefore it is wise to train potential successors so they are prepared to step up if the need arises.

Types of succession plans

There are two types of succession plans that should be considered. This will give your business something to fall back on in the case of an emergency.

1. Long-term succession plan

The first type of succession plan you should consider is your long-term succession plan. This is the plan that you will more or less stick to as a standard for key positions.

A succession plan of this nature can be reevaluated and changed as the company grows. For large companies, this would be the plan that outlines the details of succession for all key positions.

2. Emergency succession plan

A secondary emergency succession plan can also be created, where appropriate, to be deployed in the event of an emergency.

This type of plan may involve more temporary measures but is intended to keep operations running smoothly.

This could see other senior members of staff take on extra responsibilities while a replacement is sought.

Many small and medium businesses do not have a succession plan. Of those that do, some of them have only informal plans.

This can be a risk for your business as there could be unforeseen incidents that could occur such as death. It is worth creating a formal, written succession plan that is developed and easily accessible.

Here are some of the benefits for businesses of any size to create a succession plan:

1. Candidates ready to start

When an upcoming promotion, retirement, or departure is approaching you will have the next generation of leaders ready to go.

Thanks to your succession plan the replacement will already have the skills required to take over the role.

2. Encourages managers to develop junior employees

Your succession plan can help your managers to start developing lower-level employees.

The plan helps to define clear progression routes through the company so managers can share appropriate training and information with junior staff.

Managers will also be able to start training their replacement when promotions are approaching.

3. It leads to higher job satisfaction

Employees report higher job satisfaction when there is a succession plan at their company. This is because it helps to define routes to progressions and lowers job insecurity.

A succession plan can help employees understand what they need to do to achieve a promotion. It can help with goal-setting and giving employees a sense of direction at work.

4. Helps to track progress

Succession planning can help your managers to track employee progress through performance reviews.

Internal opportunities can also be quickly filled with knowledgeable employees who have been upskilled and crossed trained.

5. Keeps shareholders confident

Whenever a high-ranking postholder leaves the organization it can leave shareholders feeling uneasy.

In some cases, they may look to sell their shares. A good succession plan can help keep investors on board.

For positions like CEO or CFO, the board may have had some input into the choice of successor. This will give the shareholders confidence in the company and the new postholder.

6. Cultivate and maintain company loyalty

Having a strong culture of promoting from within can lead to increased company loyalty.

You can attract talented employees who will stay with you for a long time. This helps them to have a strong understanding of the businesses, morals, and expectations.

Employees are more likely to stick around for the long term if there are defined advancement opportunities.

Instead of an informal plan, it’s a good idea to make a comprehensive document that outlines how succession should work.

Small and family businesses may only need a limited plan that outlines succession for a single person.

Larger corporations may need a comprehensive document that starts with the hiring process and works its way through the ranks and details different leadership positions.

The fundamentals of your succession plan will remain the same which is what we’re going to look at now.

It’s also worth pointing out that this document can be revised and amended whenever it is necessary.

1. Determine the scope

You will need to figure out how comprehensive you want your succession planning to be.

A small business might only need to find a replacement for ownership. Medium and large businesses may only want to consider the succession plan for their C-suite of employees.

It may also be the case you want a succession plan that covers every eventuality from store manager to distribution to CEO.

Ask yourself the following questions to decide what is best for your business:

It’s important to understand what your specific needs are as well as the needs of the business.

The size and type of your business can help to inform some of your decisions but ultimately every business will be different.

2. Identify key positions and skills

First, you have to identify the key roles in your organization that will be good to secure.

It could be the CEO, CFO, CCO, CHRO, and different heads of departments.

Second, you might have some specific specialists that are unique to the industry or your business, e.g. it might be some highly skilled engineer, programmer, scientist, etc.

Consider the following questions to identify key positions and the skills needed for that post:

The objective is to figure out how crucial the position is. If the company would be severely affected by a vacated position then this is one that should be considered within your succession plan.

You will also need to understand what specific attributes are needed for the role. That way you can build your training and development around nurturing those key skills.

3. Identify potential candidates

Perhaps the most crucial stage is finding the employees that might be suited to a tougher challenge .

You could ask the current postholder for help determining who could step up in their absence.

It’s also worth considering that the right person for the job isn’t necessarily the next in line. Candidates could be sidestepped in the role or there could be other promising candidates in the business.

You may wish to make hiring a part of the plan and therefore can use interviews to vet potential recruits for career prospects.

Try to answer the next questions:

It’s important to identify people who want more responsibility. Your top choice maybe someone who is happy in their current role and not looking to change.

This is something that can be gauged during annual reviews or in meetings about their professional goals.

4. Speak to the candidates

It would be wise to speak with the people you are considering.

This will give you a clear answer if they would be interested in the role.

Don’t make any promises but explain that they are being considered for leadership.

Explain that nothing is guaranteed as there are plenty of moving factors to consider. This includes the current postholder, the company, and the candidates.

However, you can gauge their interest and it may help to encourage high-performing individuals to remain loyal to the company.

5. Work on professional development

Leadership development is worth investing in particularly for employees you have identified for succession into key roles.

There are a variety of ways to develop potential successors and help them to develop leadership skills.

You can create a leadership development plan to ensure candidates have the right skills and are a good fit for leading positions. Employees being groomed for leadership roles can be developed in several ways .

You need to test your employees to make sure they can meet the demands of the increased responsibilities.

Some of the ways this can be achieved are through:

Connect the candidates with business leaders in your company. They can help to develop the skills of succession candidates and even share knowledge that might not be immediately obvious.

You can send prospects on courses to help develop their skills. These could be in-house courses or ones run through independent third parties.

Task forces

Task forces and project management is a great way to test your candidates. This will give them the opportunity to lead a team and test how well they cope under pressure.

When you think about development consider the following questions:

The focus should be on improving a candidate’s interpersonal abilities and communication skills that are important in a leading position.

You will also want to give them the opportunity to learn and develop the necessary skills required to do the specific job.

6. Trial and error

There should be ample opportunity to give your succession plan a trial run with the candidates you are considering. For example, if the postholder is away on holiday or off sick for an extended period you can use this as an opportunity to try someone in the role.

The benefit here is twofold, the candidate will get a feel for the position and appreciate the opportunity. While you can assess whether they are the right candidate for the position.

Note: Such tests can affect the team so pay close attention to this . This is especially true for external candidates and people from different teams. Not everybody will like it, unless the candidate is a strong leader from the inside of the team.

This is what you need to consider:

You want to see them step up and take control of the position. This will help identify if there is any specific training they need to take the role full-time.

You can gauge whether someone is wrong for the position. This may come down to their interpersonal skills or ability to deal with new challenges.

7. Refine and redefine

Your succession plan is something that can be developed over time.

It may be that what was working years ago isn’t quite the same now.

You may need to adjust the succession plan to adapt to a changing business landscape. As the business grows you may need to redefine what is included in your succession plan.

It would be prudent to start with the most important roles in the business. After all, you can’t totally predict when a key position will become vacant.

Once you have those key positions locked down you can start to expand the scope of your succession plan.

1. Start from key roles

You should start with the most important roles first.

Which of the positions will have the greatest effect on your business if the postholder doesn’t turn up tomorrow?

Roles at an executive level are going to be the most disruptive ones. From there work out the specific skills and knowledge required for the role. This will help you to create your plan and identify potential successors.

Once the most pressing roles are covered you can look at what other roles are important to include.

2. Talk to your employees

Your succession plan will affect people and may make some people feel nervous.

It’s important to explain the scope of the succession plan and why certain roles are included in it.

You may only look to include executive positions or your plan may include managers and supervisory staff as well.

By giving a clearly defined scope you can avoid members of staff second-guessing their position.

3. Collaboration between management and HR

This is a process that should be driven by the business leaders with support from HR where necessary.

It is not strictly an HR process and therefore senior leadership should be communicated with regarding the succession plan.

Gain insights, input, and information from across the senior positions to help the succession plan run smoothly. Interviewing the post holders about the wants and needs of their job can provide crucial information.

4. Forecast your business needs

You should have an emergency succession plan in place that can deal with the untimely vacancy of a position.

Alongside this, you can create a detailed forecast and a longer-term plan. This is necessary to address things like upcoming retirement and promotions.

You will also need to consider how quickly the business can mobilize to fill this position.

A strong succession plan will understand how it will impact the business in 6 months, 1 year, and 5 years.

5. Create a pipeline of talent

Create a pipeline of talent so you have individuals ready to take up new challenges as they arrive.

A pipeline of this kind is essential for finding a talented successor but it’s also a good idea to help fill newly created positions. New recruits can be included in your pipeline of talent.

You can learn about this in our talent acquisition guide.

Even if you don’t have any open positions currently, you can still start cultivating a pool of talented individuals.

6. Annual talent reviews

Your succession plan is something that should be continually developed.

This includes reviewing the candidates on an annual basis or more. People may have moved on or into new positions within your company. Promising candidates may no longer be performing at the standard you would like.

Take a look at your succession plan every year and adapt and change things where it is necessary.

7. Build the learning culture inside your organization

It will help you nurture and grow potential candidates as well as new talents.

When you have identified the individuals that are being considered for senior positions you will need to develop their skills.

You can work with the candidates and they can lead their own individual development plan.

This ensures that their progress is actively monitored and they can take ownership of the process.

Managers should be on hand to provide guidance, resources, and provide timely reviews.

Why is succession planning important?

Succession plans make your business disaster-proof. They provide a concrete plan for filling key roles and help to avoid times of uncertainty. It can be reassuring for investors to know that there is a carefully considered plan in place.

How to do succession planning?

Succession planning should be conducted by business leaders with support from the HR teams. All affected individuals need to be involved in the process. Start with the end goal to identify what you need to achieve. Each business will have different needs so consider which positions will have the biggest effect on operations.

What is business succession planning?

Business succession planning is the process whereby you identify candidates to be groomed for senior positions. Specifically, when the incumbent leaves the role, this could be for a promotion, retirement, or an untimely death. Your business succession plan is in place to facilitate a transfer of power and keep your business sailing smoothly.

What is the correct order of the succession planning process?

Succession Planning template

Avoid moments of crisis and lack of leadership by preparing candidates for a planned or emergency replacement.

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